Investing can be a tricky and complex process, but one of the most important things to keep in mind when investing is to not become overly invested in one stock or company. This can undermine objectivity, which is crucial in making sound investment decisions. It can be difficult to maintain this level of objectivity, as investments often go against our natural instincts. In this article, we will explore how to establish an objective mindset when making investment decisions and provide guidance on how to minimize the risk of loss.
One of the most important things to remember when investing is that nothing lasts forever in the world of business and investing. A prime example of this is the rise and fall of the mobile phone market. In 1999, Finland was the birthplace of mobile phones, and Nokia's cell phone had an absolute market share, with its cell phone in charge of PPL. In the blockbuster movie Matrix released in 1999, Nokia's cell phone was featured, and it had an absolute market share. If you look at the market share at the time, Motorola, which had been selling well in Korea for a while, seems to be the second-largest market share, and you can see that Samsung was already working hard in the global mobile phone market at that time.
If you turn back time and come back to the present, you can see that the situation 24 years ago and the situation now has changed a lot the product propensity and the brands that dominate the market. Among the brands mentioned in 1999, Samsung ranked first in the world, and Apple's iPhone, which later opened the era of smartphones, ranked second in market share. Other brands can see that Chinese brands with Android have a high market share among smartphone OSs. Except for Samsung, the strong mobile phone players, who were unlikely to disappear in 1999, have been counted as "others" or have closed their businesses altogether.
Given that most of Finland's workers invested in Nokia shares for pensions, after all, in 2014, Nokia sold its mobile phone division to Microsoft and focused on mobile infrastructure. The fall of Nokia's mobile phone was based on its inability to adapt to the emergence of smartphones and Android OSs and trying to create its own direction. In fact, Nokia's Middle Management has already moved to develop systems such as the iPhone and Android, but the successful executives eventually put the project in charge, which could be even more dangerous if companies avoid risk and pursue safety.
What's important is that, from the investor's point of view, Nokia was able to affirm that it wouldn't collapse in 1999, but five years later, there was a rapid collapse in which the core business unit itself disappeared altogether. If you were investing in Nokia and didn't recognize the changes the company was facing and didn't sell, you could have lost a lot.
Investment targets constantly change. This is why it's important to stay vigilant and do your research before investing in any stock or company. It's crucial to be aware of the changes happening in the market and the industry and to be able to adapt and make decisions accordingly. One way to do this is by diversifying your investments and not putting all your eggs in one basket. This way, even if one company or stock doesn't perform well, the others will still be able to offset the losses.
Another important aspect of investing is being able to recognize the signs of a potential collapse before it happens. This can include things such as a decline in market share, a lack of innovation, or a lack of adaptability to changes in the market. By being able to recognize these signs, investors can make informed decisions about when to sell their shares or look for alternative investments.
It's also crucial to stay informed about the latest industry trends and changes in consumer behavior. For example, if you see an emerging trend in the industry, such as the shift from traditional video rental stores to streaming services, it's important to consider how this trend is affecting the public and not just the industry. This can help you identify companies or projects that are able to adapt to these changes and are likely to be successful in the long term.
When analyzing potential investment targets, it's important to consider both past and present data. Analyzing past and present situations is like analyzing pictures, but actually analyzing for investment should be thought of as analyzing videos. This is because the goal of a company or project, whether it's a company or a project, is to predict the future based on the tendencies and habits of projects that have been companies and those are constantly changing as the real world changes.
In conclusion, investing is a process that requires constant monitoring and adaptation. By maintaining objectivity, being aware of the changes happening in the market, and staying informed about industry trends and changes in consumer behavior, investors can make informed decisions and minimize the risk of loss. It's also important to diversify investments, and be aware of the signs of a potential collapse and make decisions accordingly.